The importance of democratising online trading – FinTech Futures

With the rise of the COVID-19 pandemic, the online trading industry saw a steep surge of new users.

Online trading has seen a surge in popularity in recent times

Now more than ever, traders are emerging from all walks of life. The days of trading being accessible only to big banks and hedge funds are long gone.

The popularity of online trading among a broad spectrum of people calls for the democratisation of trading. Innovative fintech companies are adapting their offerings to meet the needs of all traders with different sorts of risk appetites and trading experience.

The need for democratising trading

The advent of COVID-19 led countries around the world to withdraw into nationwide lockdowns. Its adverse effects might have motivated individuals with a diminished income to look to online trading in an attempt to fortify their savings.

On the other hand, travel bans and closed entertainment outlets led to employed consumers having more spare money on their hands, which may have been another reason for new joiners trying online trading.

In either case, the industry quickly realised that these inexperienced traders had specific needs to be met to make them sustainable.

Trading companies have always carried out the regulatory duty of ensuring the eligibility of new clients and providing them with the tools to trade safely and responsibly. Some companies started to go a step further as the popularity of online trading rose among laypeople by educating new traders and giving them many ways to practise their new skills. Helping starters find their bearings and looking out for their rights proved vital in the democratisation of trading.

Democratising trading requires a wide array of trading options, advanced trading tools, self-help guides, readymade strategies, artificial intelligence (AI), trend charts, and much more. The focus is to equip the traders with the proper knowledge and necessary experience. Learning is the key.

Getting the most out of democratising trading

Democratising trading is not possible without digital innovation. Modern tools can help new online traders find themselves on a firmer footing.

Demo accounts top the list. The never-ending trading terms and different markets and products might seem a bit daunting for new traders. The looming concern is to not lose their money in a bid to find their trading style. Demo accounts allow traders to practise with unlimited virtual funds. Experienced traders also use demo accounts to test new products or perfect their strategies.

AI has made its presence felt through trading bots more than anything else. Automating trading through bots lets traders set and execute their trading decisions. The bot independently runs the trading tasks based on the strategy built within it. A few companies even offer a platform where algorithmic investing can be used to develop a bot.

There are a myriad of other ever-evolving developments for traders of every background. Online calculators can aid traders to estimate margins, expenses, profits, and losses. Trend graphs enable them to learn from past performance and build trading strategies. Advanced tools stop them from trading to curb excess losses. Resource manuals help with finer details.

Traders show their preference for democratised trading. They choose companies that try to observe clients’ needs and wishes regardless of their trading experience or financial resources. Clients prefer firms that offer complete transparency and use technology to provide various trading tools and offerings where any trader can find what they seek.

Is democratisation a bubble?

The growing number of new traders each month is a reminder that online trading cannot remain exclusive to an elite group. As technology advances, the industry adopts the approach to create more opportunities for inexperienced traders to gain trading knowledge and skills.

Online trading firms have realised that their business success depends upon emerging traders. The competition among companies will heat up in the foreseeable future. Almost everyone will vie to get an edge in operational efficiency and effectiveness. They will set ambitious targets for the future and focus on resolving inefficiencies. They will introduce more democratisation mechanisms to convert new traders into long-term clients.

The message is clear: democratisation is a winning strategy that is here to stay.


About the author

Jean-Yves Sireau is the CEO and founder of Deriv. He founded the company in 1999.

He is also the founder of health informatics company Genseq and investment firm Fortitude Securities.

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